1. Live Below Your Means
Just because you can afford to buy something doesn’t mean you should, just because you make a good salary, or just got a raise, doesn’t mean you should spend it all, especially if you suddenly got a big jump in your income, keep your former standard of living and funnel the rest into paying off debts or adding to your retirement nest egg. Since you’re not lowering your existing budget or cutting expenses, you’ll be able to accomplish all this without feeling like you’ve had to cut back or make sacrifices.
2. Move Your Money Around
Redirect your money from one part of your financial life to another, more profitable area.
Take a couple of hours to figure out how to cut spending across your budget, making use of online apps and price-comparison sites to find cheaper alternatives on everything from electronic offers to cell phone service. Then, move those savings into an emergency or retirement fund, put them toward credit card debt or wherever else they’ll pay off. This exercise has a big added benefit; it forces you to examine where your money is actually going and how much you’re paying for things. That in and of itself — mindfulness — will change your spending behavior simply because you’re paying attention.
Money when you most need it!
3. Grow Your Emergency Fund
If you don’t have an emergency fund, several of our experts said it’s a good idea to start one, even if you can just sock away a small amount every month. If you have an emergency fund, good for you — but chances are there’s not enough in it.
I think the single most important thing someone can do right now for their financial life is to make sure they have an adequately funded emergency fund, especially in these days of high unemployment and Global economic meltdown. Try and save a minimum of the equivalent of your six months’ pay if you think your job is in jeopardy.
The key is to be able to manage emergencies from savings, rather than having to liquidate your retirement account or leaning on a high interest credit card. Trying to resolve an emergency with a credit card can lead down a dangerous path of debt. Keep your emergency fund in a high-yield savings account separate from the account you use for everyday expenses.
Plan your mortgage early!
4. Pay off Your Mortgage before Retiring
The term of your mortgage should not be longer than the number of years you plan to work.
After you retire, your income will probably drop, but your cost of living won’t. Some expenses, like health care, are likely to climb — perhaps significantly. If you can eliminate the burden of a monthly mortgage payment, you’ll have more flexibility to handle any rising costs.
Monitor your spending habits!
5. Track Your Spending
It’s a basic building block of financial success, but so many people don’t do it.
Writing down every cent you spend over the course of a week will give you a very clear picture of exactly where your money is going.
It sounds like a basic idea, but it’s a step many people don’t take. Making it a habit to track your spending will reveal areas in which you need to cut back and at the same time shed light on what to buy and what is not necessary.
6. Act like You Can’t Just ‘Throw It Away’
Live as though you don’t have garbage pickup. If you act like you can’t just throw stuff away, it will make you more mindful about what you buy and consume in the first place. People no longer shop for products that stand the test of time.
We’re spending our hard-earned Dirhams on highly packaged products that are easily disposed of, our homes and landfills are cluttered with depreciated junk. The solution to saving more money is to stop wasting it on consumer items that quickly become garbage, and switching to quality items that endure.
Danger of credit cards!
7. Pay off Credit Card Debt
Pay off or pay down credit card debt with any existing savings. With credit card APRs averaging nearly 15%, people with credit card debt pay much more in interest than they can earn by having that money invested elsewhere.
If you don’t have any savings, there’s no way to sugarcoat it: You’ll have to make some budget decisions and give some things up.
8. Put 10% of Your Income toward Retirement
Target to save and invest at least 10% of your income, no matter how little or how much you make. The sooner you start, the more wealth you’ll be able to build, Vernon says.
Even small amounts can add up over time. Alternately, even older workers can benefit — it’s never too late to start building up your retirement nest egg, you’ll just need a more aggressive savings
Be a visionary!
9. Envision Your Future
Develop a single exciting mental picture of where you want to be in five years. Each day as you get out of your house and head for the Dubai Metro on the way to work think about that image. Maybe this sounds a little silly, but visualization is an effective motivational technique. It might feel like you’re just daydreaming, but you’re planting the seed of an idea in your brain. Even when you’re not actively thinking about it, that image is going to stay in the back of your mind.
The fastest way to move forward is not to focus on a to-do list of rational steps to move forward but instead to clarify in detail the outcome that you want. When that same outcome is kept top of mind for a sustained period of time, your attitude shifts … when you apply this consistently over time, real progress is made.
Make each day count!
10. Enjoy your hard earned wages!
To put this into context, remember money together with all the other fiscal benefits are just a means to an end and not an end in itself, hence time and again we should stop & take time to appreciate/‘smell the roses’ and enjoy our hard earned wages.
This is important because not only will you give value where it’s due, but also energize yourself to be able to conquer the next financial mountain and most importantly not to lose sight that money is not the source of Happiness but simply a means to a Happy Life.
One of my favorite mantras is ‘Make each day count’ and on that thoughtful note I wish you a Healthy & Happy Financial Life.